Sallie Mae: Make Interest Payments While at University & Save!

Commerce Bank teams with Sallie Mae on new student loan product | Dollars & Sense June 22, 2010:

Commerce Bank teams with Sallie Mae on new student loan product This title looks a bit truthful, I see the usage of the word “product”, these corporations are trying to sell you something. With any product companies have advertising and marketing to induce a potential consumer to buy, but what is its value-to you-not them?!

Commerce Bank is offering the Smart Option Student Loan to help students pay off their college debt faster.Smart Option, which is provided through student loan lender Sallie Mae, allows students to make interest payments while in school. Because we know an average college student makes so much money that they can afford interest payments while enrolled full-time, providing for housing and shelter. Hmm, many obtain higher education to increase their salary potential, so what makes you think they can afford interest only payments, even though the principal is deferred? Maybe they can use some of the student loan money to pay interest, though it’s supposed to help pay for tuition, fees, books and what they need to survive while in school.

According to Commerce, a typical freshman can save more than 50 percent in interest charges over the life of the loan and it off in seven years after graduation instead of the standard 15-year term offered by other loan products. A typical freshman is 17-18 years old, where will they get this money? Their summer jobs paid minimum wage, please elaborate.

Students who enroll in the plan and make all their monthly payments by automatic debit may be eligible for a 0.25 percentage point rate reduction. In addition, students can take advantage of the Smart Reward program and earn 2 percent of their scheduled monthly payment as a reward in a Upromise account. Any percentage rate deduction is good, but what are the terms and conditions, like if they missed one payment does Sallie Mae terminate the entire program? With the latter 2% earned, I doubt the extent of benefit since the entire time inflation is rising and the student may not have been able to negotiate a fixed interest rate on the loan itself

The loan also allows customers to apply with a creditworthy co-signer, which can mean a better chance of approval and a lower rate. Students may also be eligible to apply to have the co-signer removed from the account after they graduate and make 12 consecutive loan repayments on time. We give you permission to get someone else in debt on your behalf, how gracisous of you. With many parents who have lost retirement accounts, receiving pink slips;  and wondering when they will be able to retire, why not add the high risk of their child’s student loan default. One should seriously consider whether he or she should really purchase this product; especially when college graduates, let alone some professionals are unable to find jobs with degrees.

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2 Comments »

  1. dupednontraditional Said:

    ALSV, these people are just money-hungry zombies. They have lost any ability to do anything else than devise new “products” to get their meat-hooks into people…not unlike the recent CDO/CDS/financial alchemy bull$h!t that nearly destroyed the world economy. Like junkies, they are desperate for their next hit…any hit will do. And it doesn’t matter who they take down in the process.

    I can only pray that by the time my child is ready for college (years to go yet), the student loan/higher education debacle will have crashed hard and started to right itself to something more reasonable. That, or perhaps she can do something that will not require indentured servitude.

    • A Law School Victim Said:

      Just send your child to a top notch unversity overseas or coach his or her talents for their own benefit, becoming rich without the expected need to incur massive debt!


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